ETS: Where are we now?

14/03/2013

[...] So what does this mean for airlines? Julien Dufour, CEO and EU ETS lead auditor at VerifAvia, an emissions verification body for the aviation sector, explains: “This means that aircraft operators operating exclusively intercontinental flights (i.e. no intra-EU/EFTA flights) would be exempt from surrendering EU ETS allowances for at least a period of one year. Aircraft operators operating both intra-EU/EFTA and intercontinental flights would have to surrender allowances for intra-EU/EFTA flights, but possibly not for intercontinental flights. In short, this proposal does not have any impact on aircraft operators operating exclusively intra-EU/EFTA flights.

“Intercontinental flights might not need to be reported. The condition for this is that operators return the allowances that may have been allocated to them in relation to intercontinental flights.

“All airlines (EU and non-EU) operating intra-EU/EFTA flights are still required to monitor, report, verify and offset their emissions. There is no change for airlines operating intra-EU/EFTA flights only. But of course the costs will be much lower for airlines operating intercontinental flights since those flights do not have to be reported.”

Despite all the noise from non-EU countries, aren’t EU airlines now worse off than their foreign counterparts as only they are forced to pay this tax? “It is not about the nationality of the airlines but the routes flown,” argues Dufour. “On any given route, all airlines are treated equally. However, airlines operating intra-EU/EFTA flights only might feel they are at a disadvantage because they have to cover the cost of ETS on all flights as compared to other airlines, which might be in a position to cross-subsidise the cost of ETS between affected and non-affected routes.” [...]

VerifAvia’s Dufour notes: “A market-based management (MBM) is extremely difficult to design and implement. It took many years for the EU to come up with the EU ETS, although the EU is a union composed of only 27 homogeneous countries. I cannot imagine a global MBM negotiated, approved and implemented by 190 countries before many, many years. Designing and implementing an MBM involves so many steps: monitoring rules; reporting rules; verification rules; registry rules; types of credits; accreditation rules; free credits allocation rules, etc.” [...]